Gene Marcial's 7 Commandments of Stock Investing

by Marcial, Gene G.

• ISBN13: 9780132354615
• ISBN10: 0132354616
• Edition: 1st
• Format: Hardcover
• Copyright: 2008-01-01
• Publisher: FT Press

Summary

"Gene Marcial provides iconoclastic insights into the art of successful investing while exploding the mythology of the conventional wisdom. His7 Commandments of Stock Investingis scintillating reading for both individual and institutional investors who seek an advantage in their moneymaking endeavors." --Scott Black, President of Delphi Management Inc. and a member of theBarronrs"sRoundtable "It is well understood that trading in the stock market is full of risks. But if you are ready to take the plunge, I guarantee that there will be a time when being familiar withGene Marcialrs"s 7 Commandments of Stock Investingwill be extremely important. Over the years, I have followed many of the same commandments." --Carl Icahn, Chairman, Icahn Associates "This book begins with one of the wisest investment observations Irs"ve ever encountered: ls"There are plenty of ways to make money in the stock market, but clinging to mainstream thinking or so-called conventional wisdom is not one of them.rs" The authorrs"s discussion on avoiding the diversification trap is alone worth many times the price of this book." --Bernie Schaeffer, Chairman, Schaefferrs"s Investment Research, Inc., www.SchaeffersResearch.com "Gene Marcial has been guiding literally millions of investors to better financial performance over his more than 30 years as a leading financial journalist. He consistently has demonstrated a rare instinct for knowing when to follow a trend and when to think like a contrarian. In todayrs"s turbulent times, his new book,7 Commandments of Stock Investing,is essential reading for all investors and could well add precious percentage points to the performance of any who take his words to heart." --Stephen Leeb, President, Leeb Capital Management Inc. Every week, the investment world turns to Gene Marcialrs"sBusinessWeekcolumn. Herers"s why: Marcial knows how to pick winners. Apple at 15. US Steel at 19. But Marcialrs"s track record isnrs"t limited to just one or two picks. In fact, recent analysis reveals that hers"s beaten the indexes for a fulldecade. You canrs"t get results like that following the "conventional wisdom"! You need to know what Gene Marcial has learned about stock investing--and this book will tell you. Marcial has distilled 35 years of experience into seven powerful, counterintuitive "commandments": rules that are simple and practical enough foreveryinvestor to profit from. Marcial reveals why diversification is not an optimal investment strategyhellip;why you need to focus on finding big winners, and how youcanhellip;how to profit from panic, and how to lock in your profits when everyone else is "fat and happy." Along the way, he opens up the secret, mysterious world of corporate and market insiders--showing how to track them down, emulate their approaches, and profit from their lucrative strategies. Be prepared to profit from panic Plot a clear strategy to seize opportunities during a macro-market panic Learn how to &ld

Table of Contents

Foreword	p. ix
Acknowledgments	p. xiii
About the Author	p. xiv
To the Reader	p. xv
Introduction	p. xvii
Buy Panic	p. 1
Uncontrolled Fear	p. 3
Expect the Unexpected	p. 5
Buying Stocks in Trouble	p. 10
Distress Investing	p. 14
Concentrate. Diversify Not	p. 21
Cruise-Control Strategy	p. 22
Basic Research Is Vital	p. 23
When Should You Sell?	p. 26
Rewards of Concentration	p. 28
Best Buy: Is It Ever!	p. 30
Don't Catch "Falling Knives"	p. 33
U.S. Steel: Definitely a Big Steal	p. 34
New Century Financial-an Early Catch	p. 35
AMR: Up High in the Sky	p. 37
Northwest Airlines: Still Northbound	p. 40
Buy the Losers	p. 43
Winners Disguised as Losers	p. 45
Watch the High-Profile Stocks	p. 47
Homebuilders: Ripe for the Picking	p. 50
The Price Earnings Ratio Puzzle	p. 54
RIMM: A Stock in Motion	p. 57
Time Warner: The Giant Has Awakened	p. 61
Merck: A Prescription for Winning	p. 68
Other Fallen Angels Ready to Fly	p. 73
Ford: Not Destined for the Scrapyard	p. 74
GM: Not in No Man's Land Anymore	p. 78
Motorola: Will It Recover Its Mojo?	p. 80
Forget Timing	p. 85
Market-Timing Technicians	p. 87
Timing: Underwhelming Results	p. 90
Institutional Investors Love Timing	p. 91
Retail Stores: Not Necessarily Bargains	p. 92
Banks: Banking on Some	p. 93
Citigroup	p. 94
Bank of America	p. 100
The Peter Lynch Principle	p. 101
Follow the Insider	p. 103
The Insiders' World	p. 104
A Case of Insider Trading	p. 106
Keep an Eye on Insiders' Pals	p. 109
The Warren Buffett Watchers	p. 111
Warren Buffett Wannabes	p. 114
Pressure from Big Stakeholders	p. 117
Wild Oats Markets, Inc. (OATS)	p. 119
PriceSmart, Inc. (PSMT)	p. 120
Oakley, Inc. (OO)	p. 120
CECO Environmental Corp. (CECE)	p. 121
Kos Pharmaceuticals (KOSP)	p. 122
Ferreting Out Takeover Targets	p. 122
Don't Fear the Unknown	p. 125
The Far-Flung Markets	p. 126
China's Booming Market	p. 128
Cutting in on Undervalued Stocks	p. 130
Mutual Funds	p. 131
Exchange Traded Funds (ETFs)	p. 132
American Depositary Receipts (ADRs)	p. 135
The Biotechs	p. 138
How the Pros Check Out the Biotechs	p. 142
Scrutinize the Managers	p. 143
Biotech ETFs	p. 144
Advanced Neuromodulation Systems (ANSI)	p. 145
Cleveland BioLabs (CBLI)	p. 146
MedImmune (MEDI)	p. 147
Some Unrecognized Attractive Biotechs	p. 148
Enzo Biochem (ENZ)	p. 148
Rosetta Genomics (ROSG)	p. 150
Access Pharmaceuticals, Inc. (ACCP)	p. 153
Always Invest for the Long Term: Seven Stocks for the Next Seven Years	p. 157
The Innovative Apple	p. 164
Boeing-The High-Flying Super Machine	p. 166
CVS Caremark Corp: The Number-One Value Drug Store Chain	p. 168
Genentech: The Biotech Behemoth	p. 169
JPMorgan Chase & Co.: Up on Wall Street and Main Street	p. 171
Petroleo Brasileiro S.A.: An All-Around Energy Play	p. 174
Pfizer, Inc.: The King of Big Pharma	p. 178
Epilogue	p. 187
Index	p. 193
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Introduction Praise for Gene Marcial's 7 Commandments of Stock Investing"Gene Marcial provides iconoclastic insights into the art of successful investing while exploding the mythology of the conventional wisdom. His7 Commandments of Stock Investingis scintillating reading for both individual and institutional investors who seek an advantage in their moneymaking endeavors." --Scott Black, President of Delphi Management Inc. and a member of theBarron'sRoundtable"It is well understood that trading in the stock market is full of risks. But if you are ready to take the plunge, I guarantee that there will be a time when being familiar withGene Marcial's 7 Commandments of Stock Investingwill be extremely important. Over the years, I have followed many of the same commandments." --Carl Icahn, Chairman, Icahn Associates"This book begins with one of the wisest investment observations I've ever encountered: 'There are plenty of ways to make money in the stock market, but clinging to mainstream thinking or so-called conventional wisdom is not one of them.' The author's discussion on avoiding the diversification trap is alone worth many times the price of this book." --Bernie Schaeffer, Chairman, Schaeffer's Investment Research, Inc., http://www.SchaeffersResearch.com"Gene Marcial has been guiding literally millions of investors to better financial performance over his more than 30 years as a leading financial journalist. He consistently has demonstrated a rare instinct for knowing when to follow a trend and when to think like a contrarian. In today's turbulent times, his new book,7 Commandments of Stock Investing,is essential reading for all investors and could well add precious percentage points to the performance of any who take his words to heart." --Stephen Leeb, President, Leeb Capital Management Inc. IntroductionThere are plenty of ways to make money in the stock market, but clinging to mainstream thinking or so-called conventional wisdom is not one of them. This book's seven commandments are definitely out-of-the-mainstream thinking, aimed at conditioning your mind to always look at the stock market as a market of opportunity. These seven commandments should clear your mind of old market clicheacute;s and encourage you to jump on hidden opportunities to make money.Panic is the enemy of the investor. The stock market offers great chances to make money when the big institutional investors are running for the exits and driving stock prices down. Ditto, when the institutions are driving up stock prices as they go on a buying rampage. That, in essence, is what the first commandment of this book is all about.The second commandment addresses most investors' favorite strategy: diversification. It has universal investor appeal. Most folks feel safer when their portfolios sport a diversified, "low-beta" look, consisting of stocks of every stripe. My advice: Don't. Do not diversify. Instead, concentrate the bulk of your stock market capital in a few stocks to reap robust profits. Diversification might make you feel safe. After all, that is what the many market mavens have been drilling in your head all these years. But what diversification guarantees are mediocre returns. The banks are a safe place to store money. The stock market is not. To reap rich rewards from the stock market, you must bear some risks.My third commandment goes against the widely accepted norm of going with the winners. My view: Let the winners gallop into the sunset